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You'll Totally Believe Why These Startups Failed
Nerval's Lobster writes: If you ever wanted a glimpse into what dooms startups, look no further than autopsy.io, a website that lists the reasons why many newborn tech firms imploded. The website offers entrepreneurs the ability to self-explain why their startup didn't quite make it; in a bid to separate real-life stories from entertaining fictions, the application form asks for a link to a blog post or medium article "that tells the story of the failure," along with the founder(s) Twitter handle and Crunchbase or Angel.co profile. Some of the reasons listed for failure are maddeningly opaque, such as UniSport's "for a number of reasons" or PlayCafe's "we didn't reach enough users." Others are bleakly hilarious; as the founders of Zillionears, self-billed as a "creative pre-sale platform for musicians," confessed: "People really didn't really LIKE anything about our product." If you're thinking of launching your own company, or you work for a wet-behind-the-ears startup, it's worth scanning the list to see if any of these potential crises are brewing in your setup.
Looking at all those sites reminds me of the 90's all over again. Silly sounding site names with silly business models IMO .....
You're messin' with my Zen Thing, man.....
where will the founder explain how it died?
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Many entrepreneurs wait too long before calling in a business person to watch over the financial aspects and business goals of the company.
If you're thinking of launching your own company... it's worth scanning the list to see if any of these potential crises are brewing in your setup.
I thought the whole point was to jump in head-first and just hope the thing gets bought by an aquisitions team from an established company or pull all the copper out of the walls on your way out and end up breaking even (and therefore having employed yourself for a year or three.)
Someone had to do it.
f*ckedcompany.com did this already, many years ago.
The forums lived on for a long time, and were a constant source of entertainment, but the entire site finally died in 2007.
I find most of the fail at logic. There are technical issues like banking, handling emails, setting up account records.
These can be handled (poorly) with off the shelf products, though for most use cases you can just setup a web server and build a system so you can pop expenses on/off a stack etc.
I think in business school they get told that account firms handle that, which is true, if you can afford them. However even if you can afford them, you get a better more flexible system if it's built in house because then it can be modified and upgraded as time goes on and grows with you.
Also a product that is decent and marketed. However I think those 2 areas come AFTER the logic is cemented which is problematic because business people are okay with computers but not good enough to create what is necessary.
One of the first 'autopsies' seems to identify the wrong reason for failure. "Secret", which is defined as "share personal secrets anonymously" has the reason of failure being ""does not represent the vision I had when starting the company""
That seems like a load a shit. It probably didn't succeed because no one has heard of it(at least, I haven't), and they have well-known competitors. Yik Yak and Whisper were the two that came to mind for me, and CrunchBase shows three other competitors: Steam, tellM and Quiet.
The more likely reason for their failure, rather than some PR-spun bullshit about 'vision', is that their competitors did it better than they did. I'm not sure how many of these 'autopsies' have any meaningful data.
You'll Totally Believe Why These Startups Failed
Was it because they were in the business of generating clickbait headlines?
systemd is Roko's Basilisk.
No?
Slashdot - news for nerds, "got bought by dice.com"
Puhleeeeeeze. These are all exactly the same reason, over and over and over again.
You came up with an idea that you think is awesome. Not enough other people think it's awesome, and no one wants to change how they currently do thinks to adapt to your idea or product.
This is nothing new - it's been going on for a long long time. Tech-fappers get excited about things they create, and everyone else says "meh" or doesn't want to change.
"imploded"... I suppose it is somewhat correct in this sense, but so many people use it incorrectly that I cringe when reading it, just like "payed", "clearity" and putting the dollar sign after the number: 200$
Taxes.
Did the startups fail because they relied on click bait titles but no content? I don't read articles or even summaries with click bait titles.
Then retire. Millions of people work that way, it's a valid model.
Just looking at some of the reasons for failure, I see a potential problem:
"WhatsApp for customer service"
"Tinder for jobs"
"Flash sales for toddlers"
I understand it's the '10s now, and companies can start up with an AWS account and big enough credit card limit, but it seems to me like the primary reasons for failure are (1) just a stupid idea that has no way to make money or gain customers, and (2) oversaturation and copying of "successful" companies' business plans or apps. That's one thing that hasn't changed since the 90s -- the only difference is that the companies get to hang around longer because they aren't blowing 6 figures on Sun servers and colo charges.
The offline analogue would be the frozen yogurt shop or cupcake bakery that have popped up in recent years. Nothing wrong with either, but I have seen so many of them come and go, and I feel bad because I know why. I'm sure most of those business owners read some article or listened to their friends describing the ultra-high margins to be made in the yogurt business, or living their dream of being a cupcake baker. They probably had visions of hordes of people descending on their perfectly-located shop and emptying their wallets on the counter. So, they quit their job, cash in their 401(k) and invest 6 figures to open up. Six months later, they're gone. The reason I feel bad is this -- sure, people make their own decisions and stuff, but after they've lost everything in a disastrous business venture, most peoples' lives are going to be significantly harder than if they hadn't wasted all that money. It's even worse if the owner is just a franchisee -- then the franchisee is getting rich off of the deal too.
There's a lot of noise about the stock market being too expensive like in '99 - and with the Fed seriously talking about raising rates - well, I hope you're not too close to retirement (your 401K or IRA is gonna get killed).
Thaaaank you. I was about to post my own reply about the bullshit clickbait title, but someone beat me to it. Posting anonymously so I can give you mod points.
captnjohnny1618
What's wrong with our schools?
There is a good reason why we don't let the deceased perform their own autopsies.
If Slashdot were chemistry it would look like this:Cadaverine
Did the startups fail because they relied on click bait titles but no content? I don't read articles or even summaries with click bait titles.
Evidently it's some very good clickbait because you cared enough to come here and comment, giving them ad-revenue while also worsening the comments for the rest of us.
Mission accomplished.
Starthead: "We were naive idiots"
I'm a good cook. I'm a fantastic eater. - Steven Brust
April 2014 Stipple: tag people, places, and objects in an image - “We had turned on revenue, but did not scale fast enough. We were not yet profitable,” Stipple Founder and Chief Executive Ray Flemings said.
Businesses shouldn't have to scale fast to succeed. You can grow a small business into a bigger business, as long as you aren't funded by people who are expecting to make a quick buck.
Imagine you're a venture capitalist. If you invest in a start-up, and it succeeds you can double your money in 1-2 years. If the startup folds, 9 times out of 10 it can be sold off for about what you invested into it. Sure the employees aren't going to get anything for the year the wasted there, but the equipment and parts of the business is usually worth something.
So if you can almost always make money or break even by investing, waiting 2 years, then either pulling out or reaping the rewards, then you'd be stupid not to serially invest in startups and let thousands of them collapse.
I believe this is what is meant by "did not scale fast enough". That a business must turns huge profits in short time for VCs to stick around. I've been part of a few startups that have had the plug pulled on them, even though it seemed like to me there was something worth salvaging. I later learned some of the economics of VC money and how the goals of investors are sometimes in contradiction of the goals of a small owner-operator business.
“Common sense is not so common.” — Voltaire
"Didn't get on front page of Slashdot soon enough"
The number one reason in my experience is impecunious principals in these startups. And I am being kind here...
My first thought was that AdKeeper should be on the list, but apparently that turkey is still flying, albeit with what looks like a different business model.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
...Contend in Vain.
We had an award-winning SMB ecomm package selling like hotcakes in 3 countries.
We had (arguably) the first single-cart mall on the internet.
We had an incredible team throughout the organization, people who actually knew what they were doing, and liked working with each other.
We had an incredible list of clients for whom we had done incredible custom work.
We had grown from 5 guys in a old Victorian house on a side street, to a company with two offices and over 70 employees.
We were running out of money. (Why? Dunno, I was just coding my ass off.)
5 rounds of almost getting VC funding. Finally, some friendly neighbors to the north bought us for $45M.
18 months later, everything was a smoking, fucking mess.
Why? Because our new overlords were greedy, didn't understand our business model, and tried to force their business model (such as it was) upon us.
P.S.: Avoid constant embarrassment and needless confusion: Bomb Canada Now. (just kidding)
I've seen two quasi-startups go down the tubes from the inside.
One company had some very clever ideas, but were chronically incapable of making reliable hardware, or of making software that worked. They had no internal procedures to track what they were making, what it was supposed to do, or how they knew it worked. Too many releases were "we have to ship something to keep from losing what little credibility we still have".
Another company tried to reinvent itself after its prime business peaked and then started to implode. The idea we tried to develop wasn't commercially uninteresting, but we had major focus issues. What, exactly, do we want to do? Who is going to buy it? For how much? Having owned our old industry we weren't very good at competing with others in our new industry.
Both companies had issues with ineffectual leadership, flavour-of-the-month development, and business decisions made to help friends rather than make money. Both were broadsided by external developments that eventually rendered their products commercially irrelevant.
...laura
Kiniku
Read your body's muscle electrical signals, and control things with it
"Got jerked around by co-founders who tried to do more than one startup at once"
Sounds like they didn't control things very well.
is that they're all trying to get rich without MAKING anything. Yeah, there's some software, but it's like they all saw Zuck get rich with Facebook and said "ooh, ooh, look! I can get rich with a website too!"
Here's an idea, for you younger would-be-corporate-titans: MAKE something and make it great. The US was built by people who MADE things. We succeeded in WWII because of our manufacturing capacity. We developed a huge stable middle class with manufacturing jobs that employed millions with sufficient income that one worker could support a family. There's no new law of physics or economics that says we can no longer manufacture (though admittedly the government regulations have piled-up to alarming levels). Indeed, one of the guys who is so admired here on Slashdot, Elon Musk, immigrated to the country and now manufactures cars, batteries, and rockets.
Aspire to be the next Pets.com CEO or the next SpaceX or Boeing or Ford etc CEO .... it's your choice. Millions of people have been employed by Boeing and Ford and were thus enabled to support their families. Oh, and if you still think the Facebook model is the one that's best, remember the last facebook: myspace (i.e. there's no guarantee facebook will still BE facebook next month or next year, or five years from now). Decades after the founders of Boeing, Northrop, Ford, and others like them died, THEIR names are still known to all. How many people did MySpace employ long enough and well enough to support families and who even remembers the name of the founder?
See also: Our Incredible Journey
They are a little more specific in that they only list sites that are being abandoned or absorbed by another service, instead of just listing failed services.
idea: app to order and pay for drinks at a bar or nightclub reason for failure: "hard to market ourselves properly in bars without being there"
So many start-ups are a joke. Here I found just a few of the many ways in which they fail: http://zsmith.co/principia.html
Thist looks like a really late edition of F-ckedCompany.com.
Kriston
Seriously, what's up with that headline? What's next? Here are some possible candidates:
If a train station is a place where a train stops, what's a workstation?
It doesn't help either that Startups are being pushed as the way to do tech, or the new way to make money fast (develop something and get bought out by a large vendor). It's become a buzzword. You get a whole bunch of people stuck on the idea of "hey, I could do that" or "hey I should do that" when they have only 1 of 20 facets required for it to potentially succeed.
My Favorite personal experience is the founder who failed to realize that Serial ports aren't a scalable network architecture.
Because "Manila" has just one 'L' not two. Duh!
Or the proverbial true story of the Psychic biz: "Unforeseen circumstances."
You'll totallly [stopped reading]